Sleepless in Harwich

Two times a dad, our multi-asset investment specialist Craig Brown is finding it hard to learn old lessons. Like with investments, sometimes it’s painful when you just can’t leave things be…

Lighted window at night

I recently became a father for the second time, so I’m back on the hamster wheel of sleep deprivation, nappy changing, and bottle washing. Of course, my wife and I have the added bonus of keeping a two-year-old entertained as well – no easy task at the best of times!

As if parenting isn’t enough work, I continue to suffer from an inclination to check in on the two of them whenever they’re asleep. Over and over again. The slightest noise – or indeed lack of noise – leads me to head over to their rooms and peer in to establish all is well. Unfortunately, to my wife’s endless dismay, I’m no ninja. I creep like a rhino creeps. So I often end up disturbing one or both of the tykes, and then have to spend the following 20 minutes soothing them back to sleep.

I never learn my lesson either. I end up checking up on them again – just to make sure that they are all sorted after my last botch-up – and then the cycle loops round and round and round …

As I spend the not-so-quiet small hours rocking my babies back to sleep, watching the clock tick terrifyingly close to the hour when I have to return to the office, my mind starts to blur. I feel like I’m comforting investors, and I’m trying to soothe them by telling them not to feel like they have to constantly check in on their portfolios. That I can identify with their urge and the worries but that it will only lead to regret and sleepless nights … 

Like endless and often contradictory parenting advice drives us to disturb our kids’ sleep, the 24-hour news cycle encourages investors to continually check up on their portfolios and judge success or failure, over weeks and days. Even the professionals are falling into the trap, with so much analyst and market commentary focused on the latest quarterly numbers and the prospects just three months ahead.

This increasing focus on shorter and shorter time periods is terrible for investors in the long term. Checking in too often and trying to read too much into short-term performance can lead to the feeling that you have to “do something” with your portfolio. This short-term meddling becomes habit and all the while the trading costs rise.

It’s better for someone to understand how they feel about risk and how much they can afford to take on, find investments that suit their situation and inclination and give the whole portfolio time to perform. We all know investing is full of ups and downs, it’s the nature of the beast. But a few downs in a row doesn’t mean an investment is necessarily a bad one.

If you invest in yesterday’s winners after selling yesterday’s losers, you may find yourself – and your portfolio – as low as a tired father of two who just couldn’t let well enough alone …

 

 

 

Important legal information

This area of the site is for professional advisers

Please read this page before proceeding, it explains certain legal and regulatory restrictions applicable to the distribution of this information. It is your responsibility to inform yourselves of and to observe all applicable laws and regulations of the relevant jurisdiction.

This section of the website is directed only at investment advisers and other financial intermediaries who are authorised and regulated by the Financial Conduct Authority (FCA).

The information provided in this site is directed at UK investment advisers only and must not be circulated to private clients or to the general public. It does not constitute an offer to sell, or solicit an offer to purchase any investments by anyone in any jurisdiction in which such offer or solicitation is not authorised or in which a member of the Rathbone Group is not authorised to do so.

I confirm that I am an investment intermediary authorised and regulated by the Financial Conduct Authority. I have read and understood the legal information and risk warnings below:

Important Information (Terms and Conditions)

The information contained on this site is believed to be accurate at the date of publication but no warranty of accuracy is given and the information is subject to change without notice. Any opinions or estimates included herein constitute a judgement as of the date of publication and are subject to change without notice. Furthermore, no responsibility is accepted for the accuracy of any information contained within sites provided by third parties that may have links to or from our pages.

Rathbone Investment Management Limited ("RIM") is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered Office: Port of Liverpool Building, Pier Head, Liverpool L3 1NW. Registered in England No 01448919.

In accordance with regulations, all electronic communications and telephone calls between Rathbones and its clients are recorded and stored for a minimum period of six months.

The information provided in this site is directed at UK investors only. It does not constitute an offer to sell, or solicit an offer to purchase any investments by anyone in any jurisdiction in which such offer or solicitation is not authorised or in which a member of the Rathbone Group is not authorised to do so.

In particular, the information herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in France and the United States of America to or for the benefit of United States persons (being resident in the United States of America or partnerships or corporations organised under the laws of the United States of America or any state, territory or possession thereof).

In order to comply with money laundering and other regulations, additional documentation for identification purposes may be required.

Rathbones shall have no liability for any data transmission errors such as data loss, damage or alteration of any kind including, but not limited to, any direct, indirect or consequential damage arising out of the use of services provided or referred to in this website.

Past performance should not be seen as an indication of future performance.

The value of investments and the income from them can fall as well as rise and you may not get back the amount originally invested, particularly if your client does not continue with the investment over the longer term.

Changes in the rate of exchange between currencies may cause the value of an investment to go up or down.

Interest rate fluctuations are likely to affect the capital value of investments within bond funds. When long term interest rates rise the capital value of units is likely to fall and vice versa. The effect will be more apparent on funds that invest significantly in long dated securities. The value of capital and income will fluctuate as interest rates and credit ratings of the issuing companies change.

Tax levels and reliefs are those currently applicable and may change and the value of any tax advantage will depend on individual circumstances.

Investing in emerging markets or small companies may be potentially volatile, as these investments are high risk.

The design, text and images are owned, except as expressly stated by members of the Rathbone Group. They may not be copied, transmitted, displayed, performed, distributed, licensed, altered, framed, stored or otherwise used in whole or in part or in any manner without the written consent of Rathbones except to the extent permitted and under the procedures specified in the copyright Designs and Patents Act 1988, as amended and then only with notices of Rathbones' rights.

Rate this page:
Average: 5 (3 votes)

Subscribe to the In the KNOW blog email

Archive